Talk about kicking the can down the road. Disney today extended CEO Bob Iger’s contract by two more years, giving him until the end of 2026 to fix the beleaguered House of Mouse. Oh, and he’ll work on a CEO succession plan, the company said, although it made the same comment when it brought Iger back to replace his short-lived successor (the other Bob—Chapek) last November. Yeah, we’ve all heard this line before. (Iger had his contract extended repeatedly in his first stint as CEO, from 2005 to 2020.) Why is it that the Disney board is incapable of finding a single person other than Iger in the entire world to run this company? After all, it’s not like Iger’s CEO track record is flawless.
Let’s consider: The company is stuck with nearly $50 billion in debt, a declining cable network business in ESPN et al and a streaming business that is losing a fortune. At the same time, Iger is on the hook to spend around $9 billion to buy Comcast out of Hulu as soon as next January—and to reinstate the dividend by the end of this year. Disney stock has missed out on this year’s stock market rally (the S&P 500 is up 17%, while Disney is up just 3.7% year to date, according to Koyfin). While Iger can hardly be blamed for the state of the cable industry, his decision to spend $70 billion buying Fox’s entertainment assets in 2019 increased the company’s exposure to cable and loaded the company up with debt. Now, according to a Wall Street Journal report on Tuesday, he is considering selling the Star India business, one of the key assets acquired in the Fox deal. That only reinforces the idea Iger overpaid for Fox.
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